Donors Pledge New Aid To Palestinians

On November 30, 1998, 43 international donors at a U.S.-sponsored conference in Washington pledged more than $3 billion in financial aid to the Palestinian Authority (PA). The United States, which had already promised $500 million in aid over the next five years, agreed to contribute another $400 million during that period. The European Union pledged about $480 million, Japan $200 million, Norway $170 million, Saudi Arabia $100 million, Kuwait $80 million and Canada $30 million. Currently the PA's annual budget is $860 million.

The U.S. has already distributed $375 million in direct aid and $125 million worth of loan guarantees in the last five years. Some of this money funded housing and roads, but a majority of the $2.1 billion raised from the international community at the October 1993 donor conference was used to cover deficits in the Palestinian budget. U.S. law prohibits American aid being given directly to the Palestinian Authority. Such assistance is disbursed to specific projects under the supervision of the U.S. government.

The new commitments to the Palestinians came amid reports from Europe that the PA had misappropriated international funds. In particular, donations for a low income housing development in Gaza were reported to have been used to build luxury apartments for confidantes of Yasser Arafat.

Meanwhile, Israeli and American negotiators were discussing an Israeli request for more than $1 billion to cover the cost of the withdrawal from the West Bank mandated by the Wye agreement.

The Administration apparently plans to ask for the additional aid to both the Israelis and Palestinians together to mute criticism and create a coalition of support among Arab American and pro-Israel organizations.